Nanocrystalline Fe-Zr alloys exhibit extraordinary thermal stability to resist grain coarsening at elevated temperatures, which enables their potential applications in various fields. It has been suggested the stabilization of nanoscale grain size of these alloys is ascribed to the reduction in grain boundary energy by Zr segregation in grain boundaries at modest temperatures and Zener pinning of Fe3Zr precipitates at high temperatures. Our new results obtained by a combined investigation of high-resolution X-ray diffraction, transmission electron microscopy, and atom probe tomography indicate that below the temperatures for formation of Fe3Zr precipitates, Zr atoms do no show a strong segregation in grain boundaries; instead, highly dispersed Zr-rich clusters having a similar structure to the matrix bcc phase may probably play an dominant role in stabilizing the nanoscale grain size. The underlying stabilization mechanism of these clusters on the grain size is under investigations.